US LLCs: change in UK Tax Treatment

The UK Supreme Court has recently issued a final judgement in the long running case of Anson v HMRC (the Swift case), which has been appealed several times but has finally been decided in the taxpayer’s favour. The ruling by the Supreme Court is that Anson is entitled to double taxation relief and can claim credits via his UK tax return for US federal and state taxes paid on his share of a US LLC’s profits.

This represents a significant change in the way HMRC will need to treat UK tax residents with interests in the profits of US LLCs, implying that the LLCs will be treated as transparent entities for UK (as well as for US) tax purposes. Previously, HMRC would tax individuals on distributions from LLCs as and when they were paid out, and restrict credits for foreign tax paid. If you have an interest in a US LLC you will need to review how you will be treated in light of this ruling. It is anticipated that HMRC will provide guidance on how this decision will be interpreted in future and also for prior years.

If you would like any advice regarding the above article or would simply like to discuss other ways in which we could help you or your business, please contact us on 01962 856 990 or customerservice@taxinnovations.com

On 29 October 2018, the Chancellor set out his budget to Parliament, stating that austerity is "finally coming to an end" as the economic outlook improves, and appearing to spread some of the potential benefits around. The budget offered little in the way of significant overhaul, largely focussing on adjustments to existing reliefs, but what were the actual changes to the UK tax environment?